Will liner ships make fewer port calls per route?

Abstract

Traditional liner shipping route networks consists of many port calls per route. However, container ship sizes have increased substantially over the past few years. These large container ships benefit from economies of scale at sea, but might suffer diseconomies of scale in ports. Therefore, we investigate whether larger container ships will lead to fewer port calls per route. First, we discuss the influence of fewer port visits on some aspects that are difficult to include in a mathematical analysis. Thereafter, we propose a mathematical approach to obtain networks with fewer port calls per route. Liner shipping route networks are generated by distinguishing between hub routes and regional routes. Hub routes are used to connect a small number of hubs, while regional routes connect all other ports with its nearest hub. An iterative approach is used to generate networks, which are evaluated using a mixed integer program in which the joint ship allocation and cargo routing is solved. A case study is performed with different combinations of seven hub ports. In the case study, three capacity scenarios are considered: low, base and high capacity. Our networks generate profits that are more than 25% higher compared with the best known networks in literature